<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 1999
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
----------------------
Commission file number 1-12630
CENTERPOINT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 36-3910279
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1808 Swift Road, Oak Brook, Illinois 60523-1501
(Address of principal executive offices)
(630) 586-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
Number of Common Shares of Beneficial Interest outstanding as of August 16,
1999: 20,162,263 Number of Class B Common Shares of Beneficial Interest
outstanding as of August 16, 1999: 76,802.
<PAGE>
PART 1. FINANCIAL INFORMATION
This Form 10-Q/A reflects the Company's revision of earnings as announced in our
September 28, 1999 press release, attached as Exhibit 99 to this Form 10-Q/A.
ITEM 1. FINANCIAL STATEMENTS
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS REVISED AS OF JUNE 30, 1999 AND DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
----------- -----------
<S> <C> <C>
Assets:
Investment in real estate:
Land and leasehold $ 153,305 $ 132,270
Buildings 587,333 504,895
Building improvements 107,353 94,474
Furniture, fixtures, and equipment 19,713 18,817
Construction in progress 22,282 18,401
----------- -----------
889,986 768,857
Less accumulated depreciation and amortization 74,533 62,257
----------- -----------
Net investment in real estate 815,453 706,600
Cash and cash equivalents 2,659 475
Restricted cash and cash equivalents 28,200 33,056
Tenant accounts receivable, net 21,733 18,067
Mortgage notes receivable 890 901
Investment in and advances to affiliate 86,910 43,796
Prepaid expenses and other assets 6,893 4,030
Deferred expenses, net 14,193 10,681
----------- -----------
$ 976,931 $ 817,606
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 92,899 $ 103,520
Senior unsecured debt 200,000 100,000
Tax-exempt debt 55,000 75,540
Line of credit 111,600 77,600
Convertible subordinated debentures payable 7,551 8,058
Preferred dividends payable 1,132 1,060
Accounts payable 10,507 7,986
Accrued expenses 38,898 31,060
Rents received in advance and security deposits 5,572 5,323
----------- -----------
523,159 410,147
----------- -----------
Commitments and contingencies
Shareholders' equity:
Series A preferred shares of beneficial interest, $.001 par value, 10,000,000 shares
authorized; 3,000,000 issued and outstanding having a liquidation
preference of $25 per share ($75,000) 3 3
Series B convertible preferred shares of beneficial interest, $.001 par value;
1,000,000 issued and outstanding having a liquidation preference of
$50 per share ($50,000) 1
Common shares of beneficial interest, $.001 par value, 47,727,273 shares
authorized; 20,129,224 and 18,753,474 issued and outstanding, respectively 20 19
Class B common shares of beneficial interest, $.001 par value, 2,727,727
shares authorized; 76,802 and 1,398,088 issued and outstanding, respectively 1
Additional paid-in-capital 498,371 449,229
Retained earnings (deficit) (44,351) (41,497)
Unearned compensation - restricted stock (272) (296)
----------- -----------
Total shareholders' equity 453,772 407,459
----------- -----------
$ 976,931 $ 817,606
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
2
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AS REVISED FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 1999 AND 1998
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------- --------
1999 1998 1999 1998
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 21,598 $ 18,580 $ 42,941 $ 36,383
Straight-line rents 1,420 1,157 2,264 2,521
Expense reimbursements 6,229 6,115 12,797 11,573
Mortgage interest income 364 245 408 800
--------- --------- --------- ---------
Total operating and investment revenue 29,611 26,097 58,410 51,277
--------- --------- --------- ---------
Other Revenue:
Real estate fee income 1,978 597 6,367 2,308
Equity in net income of affiliate 465 (113) 873 (218)
--------- --------- --------- ---------
Total other revenue 2,443 484 7,240 2,090
--------- --------- ---------
Total revenue 32,054 26,581 65,650 53,367
--------- --------- --------- ---------
Expenses:
Real estate taxes 7,127 6,001 13,692 11,949
Property operating and leasing 3,282 3,210 6,863 6,752
General and administrative 940 1,001 1,846 1,992
Depreciation and amortization 7,223 5,186 13,220 9,882
Interest expense:
Interest incurred, net 5,018 3,056 9,378 5,984
Amortization of deferred financing costs 505 439 961 925
--------- --------- --------- ---------
Total expenses 24,095 18,893 45,960 37,484
--------- --------- --------- ---------
Operating income 7,959 7,688 19,690 15,884
Other income (expense):
Gain (loss) on sale of real estate 11 448 1,402
Other income (expense) (7) (21) (27) (37)
--------- --------- --------- ---------
Income before extraordinary item 7,952 7,678 20,111 17,249
Extraordinary item (582) (582)
--------- --------- --------- ---------
Net income 7,370 7,678 19,529 17,249
Preferred dividends (1,662) (1,590) (3,252) (3,180)
--------- --------- --------- ---------
Net income available to common shareholders $ 5,708 $ 6,088 $ 16,277 $ 14,069
========= ========= ========= =========
Per share income before extraordinary item:
Basic $ 0.29 $ 0.30 $ 0.84 $ 0.72
Diluted $ 0.29 $ 0.30 $ 0.83 $ 0.71
Per share net income available to common shareholders:
Basic $ 0.28 $ 0.30 $ 0.81 $ 0.72
Diluted $ 0.28 $ 0.30 $ 0.80 $ 0.71
Distributions per common share $ 0.475 $ 0.438 $ 0.950 $ 0.875
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS AS REVISED FOR THE SIX MONTHS ENDED JUNE
30, 1999 AND 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------
1999 1998
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 19,529 $ 17,249
Adjustments to reconcile net income to net cash provided
by operating activities:
Extraordinary item 582
Bad debts 342 100
Depreciation 12,339 9,277
Amortization of deferred financing costs 961 925
Other amortization 881 605
Straight-line rents (2,264) (2,522)
Incentive stock awards 24 104
Interest on converted debentures 49 36
Equity in net income of affiliate (873) (401)
Gain on disposal of real estate (448) (1,402)
Net changes in:
Tenant accounts receivable (1,768) (2,872)
Prepaid expenses and other assets (705) (390)
Rents received in advance and security deposits (11) (75)
Accounts payable and accrued expenses 4,086 4,505
--------- --------
Net cash provided by operating activities 32,724 25,758
--------- --------
Cash flows from investing activities:
Change in restricted cash and cash equivalents 4,856 2,681
Acquisition of real estate (106,759) (31,738)
Additions to construction in progress (16,172) (18,041)
Improvements and additions to properties (13,566) (11,983)
Disposition of real estate 22,319 29,204
Change in deposits on acquisitions (2,221) (3,416)
Issuance of mortgage notes receivable (17,462)
Repayment of mortgage notes receivable 11 15,125
Investment in and advances to affiliate (42,241) (5,682)
Receivables from affiliates and employees 58 27
Additions to deferred expenses (5,939) (3,009)
--------- --------
Net cash used in investing activities (159,654) (44,394)
--------- --------
Cash flows from financing activities:
Proceeds from sale of preferred shares 50,000 24,785
Proceeds from sale of common shares 613
Offering costs paid (2,023) (289)
Proceeds from issuance of unsecured notes payable 100,000 100,000
Proceeds from issuance of mortgage notes payable 21,605
Proceeds from line of credit 214,300 48,400
Repayment of mortgage notes payable (32,226)
Repayment of revenue bonds (20,540)
Repayment of line of credit (180,300) (133,600)
Repayment of notes payable (33)
Distributions (22,315) (20,240)
--------- --------
Net cash provided by financing activities 129,114 19,023
--------- --------
Net change in cash and cash equivalents 2,184 387
Cash and cash equivalents, beginning of the year 475 1,652
--------- --------
Cash and cash equivalents, end of period $ 2,659 $ 2,039
========= ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION:
These unaudited Consolidated Financial Statements of CenterPoint Properties
Trust, a Maryland real estate investment trust, and Subsidiaries (the
"Company"), have been prepared pursuant to the Securities and Exchange
Commission ("SEC") rules and regulations and should be read in conjunction
with the December 31, 1998, Financial Statements and Notes thereto included
in the Company's Form 10-K/A. The following Notes to Consolidated Financial
Statements highlight significant changes from the Notes included in the
December 31, 1998, Audited Financial Statements and present interim
disclosures as required by the SEC. The accompanying Consolidated Financial
Statements reflect, in the opinion of management, all adjustments necessary
for a fair presentation of the interim financial statements. Except as
referred to below, all such adjustments are of a normal and recurring nature.
The consolidated balance sheet as of December 31, 1998 has been derived from
the Company's Audited Financial Statements. Certain amounts in the financial
statements have been revised as described in Note 12.
The consolidated statements of operations and statements of cash flows for
prior periods have been reclassified to conform with current classifications
with no effect on results of operations or cash flows.
1. PREFERRED SHARES, COMMON SHARES OF BENEFICIAL INTEREST AND RELATED
TRANSACTIONS
In January and February, 1999, 536,981 and 784,305 of the Company's Class B
common shares, respectively, were converted by the holder of the Class B
common shares into 536,981 and 784,305 common shares.
In June, 1999, the Company completed a public offering of 1,000,000 shares of
7.50% Series B Convertible Cumulative Redeemable Preferred Shares at $50.00
per share. The shares have no maturity date but may be redeemed by the
Company for $50.00 per share by June 30, 2004. The shares are convertible
into common shares at a conversion price of $43.50 per common share,
equivalent to a conversion rate of 1.1494 to 1. The net proceeds of the
offering, approximately $48.0 million, were used to refund outstanding
balances under the Company's unsecured line of credit.
2. RECENT PRONOUNCEMENTS
In May, 1998, the FASB issued SFAS Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement, effective for financial
statements for fiscal years beginning after June 15, 2000, provides a
comprehensive and consistent
5
<PAGE>
standard for the recognition and measurement of derivatives and hedging
activities. The Company currently has no derivatives outstanding.
3. ACQUISITION AND DISPOSITION OF REAL ESTATE
In February, 1999, the Company disposed of a property, located in Chicago,
Illinois, for approximately $3.7 million. The disposition of the property
qualified for treatment as a tax-free exchange under the Internal Revenue
Code. Also in February, 1999, the Company purchased a property for
approximately $4.3 million with borrowings from the Company's unsecured line
of credit.
In March, 1999, the Company purchased three properties. The first property,
located in Yorkville, Wisconsin, was purchased for approximately $3.8 million
with proceeds from the tax-free exchange account. The second property,
located in Willowbrook, Illinois, was purchased for approximately $4.2
million with proceeds from the tax-free exchange account. The third property,
located in Munster, Indiana, was purchased for approximately $9.6 million
with borrowings from the Company's unsecured line of credit.
In May, 1999, the Company purchased 42 properties. The first property, a
368,215 square foot facility, located in Carol Stream, Illinois was purchased
for approximately $8.3 million. The next 10 properties, totaling 121,408
square feet, were purchased as a portfolio for approximately $10.0 million.
The portfolio consists of 10 industrial land parcels, used as bus terminals.
All of the properties are located in Illinois, throughout the Chicago Region.
The next 31 properties, totaling 1,245,494 square feet, were purchased as a
portfolio for approximately $44.0 million with borrowings from the Company's
unsecured line of credit. The portfolio properties are located in Illinois,
throughout the Chicago region.
Also in May, 1999, the Company disposed of a property, located in
Edwardsville, Illinois, for approximately $20 million.
In June, 1999, the Company purchased three properties. The first property,
located in Elk Grove Village, Illinois, was purchased for approximately $2.3
million. The second property, located in Milwaukee, Wisconsin was purchased
for approximately $2.7 million. The third property, located in Elk Grove,
Illinois, was purchased for approximately $3.4 million.
All of the above mentioned purchases of properties were funded with proceeds
from the company's unsecured line of credit.
4. INVESTMENT IN AND ADVANCES TO AFFILIATE
The Company holds approximately 99% of the economic interest in CenterPoint
Realty Services Corporation ("CRS"), an unconsolidated taxable subsidiary, in
the form of non-voting common equity. CRS and its subsidiaries engage in
businesses and services which
6
<PAGE>
compliment the Company's business, including the provision of services and
commodities to tenants of the Company, the development of real property and
the management of properties owned by third parties. Income from these
activities, received by REITs and their qualified REIT subsidiaries, is
limited under current REIT tax regulations.
As of June 30, 1999, the Company had advanced to CRS approximately $84.8
million under a series of demand loans with interest rates ranging from 8.0%
to 11.1%. CRS used the proceeds of the loans towards development projects
currently under construction and the purchase of land held for future
development. Principal and interest are due upon demand.
The Company either purchases development projects from CRS or CRS sells
development projects to independent third parties. Projects undertaken by CRS
are developed under guaranteed maximum price contracts, substantially
eliminating any construction risk.
5. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Supplemental disclosures of cash flow information for the six months ended
June 30, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Interest paid $ 4,007 $ 4,686
Interest capitalized 656 1,116
</TABLE>
In conjunction with the acquisition of real estate, for the six months ended
June 30, 1999 and 1998 the Company acquired the following asset and assumed
the following liability amounts:
<TABLE>
<CAPTION>
1999 1998
------------ ----------
<S> <C> <C>
Purchase of real estate $ 109,999 $ 32,569
Liabilities, net of other assets (3,240) (831)
------------- ----------
Acquisition of real estate $ 106,759 $ 31,738
============= ==========
</TABLE>
In conjunction with the disposition of real estate, the Company disposed of
the following asset and liability amounts for the six months ended June 30,
1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
Disposal of real estate $ 22,598 $ 29,575
Liabilities, net of other assets (279) (471)
------------ -----------
Disposition of real estate $ 22,319 $ 29,104
============ ===========
</TABLE>
7
<PAGE>
Conversion of convertible subordinated debentures payable for the six months
ended June 30, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
------------- ------------
<S> <C> <C>
Convertible subordinated debentures converted $ 507 $ 2,127
Common shares issued at $18.25 per share
27,778 and 116,544, respectively 507 2,127
-------------- -------------
Cash disbursed for fractional shares $ - $ -
============== =============
</TABLE>
6. SENIOR UNSECURED DEBT
On March 15, 1999 the Company issued $100 million, 7.142% senior unsecured
notes due March 15, 2004. The net proceeds of $99.3 million were used to
repay substantially all amounts then outstanding under the Company's
unsecured line of credit.
7. TAX-EXEMPT DEBT
The Company refinanced the $20.5 million tax-exempt debt secured by Lake
Shore Dunes Apartments, with a 35 year assumable, HUD non-recourse tax-exempt
and taxable debt for approximately the same amount with a fixed interest rate
of 6.195%. This refinancing resulted in the write-off of $0.6 million in
unamortized financing fees which are reflected as an extraordinary item in
the consolidated statements of operations.
8. COMMITMENTS AND CONTINGENCIES
In the normal course of business, from time to time, the Company is involved
in legal actions relating to the ownership and operations of its properties.
In management's opinion, the liabilities, if any, that may ultimately result
from such legal actions are not expected to have a materially adverse effect
on the consolidated financial position, results of operations and liquidity
of the Company.
The Company has entered into other contracts for the acquisition of
properties. Each acquisition is subject to satisfactory completion of due
diligence and, in the case of development projects, completion and occupancy
of the projects.
At June 30, 1999, six of the properties owned by the Company are subject to
purchase options held by certain tenants. The purchase options are
exercisable at various intervals through 2006 for amounts that are greater
than the net book value of the assets. Management is not currently aware of
planned exercises of options and believes that any potential exercises would
not materially affect the results or prospects of the Company.
9. SUBSEQUENT EVENTS
On August 12, 1999, the Company announced the redemption of all of its
outstanding 8.22% Convertible Subordinate Debentures due 2004 ($6,948,000
principle amount of
8
<PAGE>
Debentures is currently outstanding). The redemption will
occur on September 24, 1999 and will be at par with interest accrued to the
redemption date.
10. EARNINGS PER COMMON SHARE
The following are the reconciliations of the numerators and denominators of
the basic and diluted earnings per share for the three months ended June 30,
1999 and 1998 and the six months ended June 30, 1999 and 1998.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1999 1998 1999 1998
------ ------ ------ ------
(in thousands, except for share data)
<S> <C> <C> <C> <C>
Numerators:
Income before extraordinary item $ 7,952 $ 7,678 $ 20,111 $ 17,249
Dividends on preferred shares (1,662) (1,590) (3,252) (3,180)
------------ ------------ ------------ ------------
Income before extraordinary item - for basic EPS 6,290 6,088 16,859 14,069
Dividends on convertible preferred shares 72 72
------------ ------------ ------------ ------------
Income before extraordinary item - for diluted EPS $ 6,362 $ 6,088 $ 16,931 $ 14,069
============ ============ ============ ============
Net income $ 7,370 $ 7,678 $ 19,529 $ 17,249
Dividends on preferred shares (1,662) (1,590) (3,252) (3,180)
------------ ------------ ------------ ------------
Net income available to common shareholders - for
basic EPS 5,708 6,088 16,277 14,069
Dividends on convertible preferred shares 72 72
------------ ------------ ------------ ------------
Net income available to common shareholders - for
diluted EPS $ 5,780 $ 6,088 $ 16,349 $ 14,069
============ ============ ============ ============
Denominators:
Weighted average common shares outstanding - for
basic EPS 20,185,921 19,985,422 20,173,928 19,602,554
Effect of convertible preferred shares 101,048 50,803
Effect of share options 297,824 236,912 238,445 240,688
------------ ------------ ------------ ------------
Weighted average common shares outstanding - for
diluted EPS 20,584,793 20,222,334 20,463,176 19,843,242
============ ============ ============ ============
</TABLE>
The assumed conversion of the convertible subordinated debentures into common
shares for purposes of computing diluted earnings per share by adding
interest expense for the debentures to the numerators, and adding assumed
share conversions to the denominators for the three months ended June 30,
1999 and 1998 and the six months ended June 30, 1999 and 1998 would be
anti-dilutive.
11. PRO FORMA FINANCIAL INFORMATION
Due to the effect of securities offerings in June, 1999, March, 1998, and
April 1998, and the 1998 and 1999 acquisitions and dispositions of
properties, the historical results are not indicative of the future results
of operations. The following unaudited pro forma information for the six
months ended June 30, 1999 and 1998 is presented as if the 1998 and 1999
acquisitions and dispositions, the 1998 and 1999 securities offerings, and
the corresponding repayment of certain debt had all occurred on January 1,
1998 (or the date the property first commenced operations with a third party
tenant, if later). The pro forma information is based upon historical
information and does not purport to present
9
<PAGE>
what actual results would have been had the offerings and related
transactions, in fact, occurred at January 1, 1998, or to project results for
any future period.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1999 1998
------ ------
(in thousands, except for share and per share data)
<S> <C> <C>
Total revenues $ 69,619 $ 62,638
Total expenses 47,464 42,360
-------- ---------
Income before extraordinary item 22,155 20,278
Preferred dividends (5,055) (5,055)
-------- ---------
Income before extraordinary item
available to common shareholders $ 17,100 $ 15,223
======== =========
Per share income before extraordinar available to common shareholders:
Basic $ .8569 $ 0.76
Diluted $ .7973 $ 0.71
Weighted average common shares
outstanding - basic 20,173,928 19,972,724
Weighted average common shares
outstanding - diluted 21,560,952 21,363,837
</TABLE>
12. REVISION
During the third quarter of 1999, the Company determined that it had
recognized certain participation, assignment, consulting and financing fees
in periods in advance of that permitted and has revised previously issued
financial statements accordingly. In addition, the Company revised previously
issued financial statements to recognize, for financial reporting purposes,
certain gains in connection with tax-deferred exchanges that had not been
previously recognized. The financial statement revisions effect only the
timing of fee revenue and HAVE NO EFFECT ON PREVIOUSLY REPORTED CASH FLOW or
on the total fee revenue to be recognized.
10
<PAGE>
The effect of this revised reporting on the Company's condensed balance sheets,
condensed statements of operations, net income and earnings per share is as
follows:
<TABLE>
<CAPTION>
(in thousands, except for per share data)
For the six months ended
June 30,
--------
1999 1998
---- ----
Previously As Previously As
Reported Revised Reported Revised
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Condensed Balance Sheets:
Investment in real estate, net $813,333 $815,453 $617,228 $637,264
Mortgage notes receivable 890 890 28,802 10,168
Other assets 164,042 160,588 87,127 84,824
--------- -------- -------- --------
Total assets $978,265 $976,931 $733,157 $732,256
========= ======== ======== ========
Long term debt $467,050 $467,050 $283,408 $283,408
Other liabilities 56,109 56,109 37,528 37,528
Shareholders' equity 455,106 453,772 412,221 411,320
--------- -------- -------- --------
Total liabilities and
shareholders' equity $978,265 $976,931 $733,157 $732,256
========= ======== ======== ========
Condensed Statements of Operations:
Operating and investment revenue $ 58,391 $ 58,410 $ 51,227 $ 51,277
Other revenue 4,462 7,240 _4,075 2,090
--------- -------- -------- --------
Total revenue 62,853 65,650 55,302 53,367
Operating expenses (45,960) (45,960) (37,484) (37,484)
Other income (expense) (27) 421 (37) 1,366
Extraordinary item (582) (582)
--------- -------- --------
Net income $ 16,284 $ 19,529 $ 17,781 $ 17,249
Net income available to common shareholders per share:
Net income (loss) per share- basic $ .65 $ .81 $ .74 $ .72
Net income (loss) per share- diluted $ .64 $ .80 $ .74 $ .71
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
(in thousands, except for per share data)
For the three months ended
June 30,
--------
1999 1998
---- ----
<S> <C> <C> <C> <C>
Condensed Statements of Operations:
Operating and investment revenue $ 29,611 $ 29,611 $ 26,001 $ 26,097
Other revenue 2,007 2,443 1,982 484
--------- -------- -------- --------
Total revenue 31,618 32,054 27,983 26,581
Operating expenses (24,095) (24,095 (18,893) (18,893)
Other income (expense) (7) (7) (21) (10)
--------- -------- -------- --------
Net income $ 7,516 $ 7,952 $ 9,069 $ 7,678
========= ======== ======== ========
Net income available to common shareholders per share:
Net income (loss) per share- basic $ .26 $ .28 $ .37 $ .30
Net income (loss) per share- diluted $ .26 $ .28 $ .37 $ .30
</TABLE>
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL
CONDITION.
The following is a discussion of the historical operating results of the
Company. The discussion should be read in conjunction with the Form 10-K/A
filed for the fiscal year ended December 31, 1998 and the unaudited financial
statements presented with this Form 10-Q/A.
The Company announced in the 3rd quarter 1999 that it was restating
previously audited and unaudited financial statements for the years 1997,
1998 and 1999. See Exhibit 99 to this Form 10-Q/A.
The revision reflects the recognition of gains, for financial reporting
purposes, on certain completed sales structured as tax-deferred exchanges
under Section 1031 of the Internal Revenue Code, where gains are not
recognized for tax purposes. Secondly, the revision reflects the timing of
gain recognition from other property sales related to the Company's
development activity. While the timing of the reported gains from these
latter transactions has been shifted, the aggregate gain remains unchanged
and no cash or tax effect has resulted. As of the 3rd quarter 1999, all gains
have been recognized
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1999 TO THREE MONTHS ENDED JUNE 30,
1998.
REVENUES
Total revenues increased by $5.5 million or 20.6% over the same period last
year.
In the second quarter of 1999, 92.4% of total revenues of the Company were
derived primarily from base rents, straight-line rents, expense
reimbursements and mortgage income (operating and investment revenue),
pursuant to the terms of tenant leases and mortgages held for space at the
warehouse/industrial properties.
Operating and investment revenues increased by $3.5 million in the second
quarter of 1999. A portion of the increase from the prior year is due to
income from forty-nine properties acquired and one completed build-to-suit in
the first six months of 1999, totaling 3.3 million square feet, net of two
owned property dispositions as of June 30, 1999. The remainder of the
increase was attributable to a full period of income from the 1998
acquisition of thirty properties and two completed build-to-suit properties,
totaling 4.0 million square feet, net of six property dispositions.
Other revenues increased $2.0 million due to increased real estate fee income
earned by the Company in connection with build-to-suit, development and leasing
activities which
13
<PAGE>
was partially offset by decreased property and build-to suit sales by the
Company's unconsolidated affiliate.
OPERATING AND NONOPERATING EXPENSES
Real estate tax expense and property operating and leasing expense increased
by $1.2 million from period to period. The majority of the increase, $1.1
million, resulted from a full period of real estate taxes on 1998
acquisitions and a partial period of real estate taxes on 1999 acquisitions,
net of dispositions. Property operating and leasing costs increased slightly.
However, property operating and leasing costs as a percentage of total
revenues decreased from 12.111.5% to 10.210.4% when comparing the second
quarter of 1998 to the second quarter of 1999 due mainly to efficiencies
realized by the Company.
General and administrative expenses decreased slightly when comparing periods
despite the growth of the Company. As a percentage of total revenues, general
and administrative expenses decreased from 3.86% to 2.93.0% when comparing
the second quarter of 1998 to the second quarter of 1999 due to efficiencies
realized by the Company.
Depreciation and amortization increased by $2.0 million due to a full period
of depreciation on 1998 acquisitions and partial period depreciation on 1999
acquisitions.
Interest incurred increased by approximately $2.0 million over the same
period last year due to higher average balances outstanding in the second
quarter of 1999 compared to 1998.
Other income (expenses) remained consistent when comparing periods.
Due to the refinancing of debt for the Lake Shore Dunes Apartments, the
Company wrote off unamortized financing costs related to the early
extinguishment of the original debt of $0.6 million.
NET INCOME AND OTHER MEASURES OF OPERATIONS
Net income decreased $0.3 million or 4.0% largely due to the increase in real
estate taxes, depreciation and interest expense from the net acquisition of
warehouse/industrial real estate and the early extinguishment of debt.
Funds from operations (FFO) increased 20.916.3% from $11.512.9 million to
$13.91 from the second quarter of 1998 to the second quarter of 1999. The
National Association of Real Estate Investment Trusts (NAREIT) defines funds
from operations as net income before extraordinary items plus depreciation
and amortization less the amortization of deferred financing costs. The
Company considers FFO and FFO growth to be one relevant measure of financial
performance of equity REITs that provides a relevant basis for comparison
among REITs, and it is presented to assist investors in analyzing the
performance of the Company.
14
<PAGE>
When comparing the second quarter results of operations of properties owned
at April 1, 1998 with the results of operations of the same properties for
the second quarter 1999 (the "same property" portfolio), the Company
recognized an increase of approximately 1.5% in net operating income. This
same store increase was due to the timely lease up of vacant space, rental
increases on renewed leases and contractual increases in minimum rent under
leases in place.
The Company assesses its operating results, in part, by comparing the Net
Revenue Margin between periods. Net Revenue Margin is calculated for the "in
service" portfolio by dividing net revenue (total operating and investment
revenue less real estate taxes and property operating and leasing expense) by
adjusted operating and investment revenue (operating and investment revenue
less expense reimbursements, adjusted for leases containing expense stops).
This margin indicates the percentage of revenue actually retained by the
Company or, alternatively, the amount of property related expenses not
recovered by tenant reimbursements. The margin for the second quarter of 1999
was 86.0% compared with 90.2% for the same period last year, decreasing due
mainly to transitional vacancy. The second quarter margin was in line with
the Company's expectations.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1999 TO SIX MONTHS ENDED JUNE 30, 1998.
REVENUES
Total revenues increased by $12.3 million or 23.0% over the same period last
year.
In the first half of 1999, 89.0% of total revenues of the Company were
derived primarily from base rents, straight-line rents, expense
reimbursements and mortgage income (operating and investment revenue),
pursuant to the terms of tenant leases and mortgages held for space at the
warehouse/industrial properties.
Operating and investment revenues increased by $7.17. million in the first
half of 1999. A portion of the increase from the prior year is due to income
from fifty-one properties acquired and one completed build-to-suit in the six
months of 1999, totaling 3.3 million square feet, net of twoone dispositions
as of June 30, 1999. The remainder of the increase was attributable to a full
period of income from the 1998 acquisition of thirty properties and one
completed build-to-suit property, totaling 4.0 million square feet, net of
six property dispositions.
Other revenues increased $5.2 million due to increased real estate fee income
earned by the Company in connection with build-to-suit, development and
leasing activities which was partially offset by decreased property and
build-to suit sales by the Company's unconsolidated affiliate.
OPERATING AND NONOPERATING EXPENSES
15
<PAGE>
Real estate tax expense and property operating and leasing expense increased
by $1.9 million from period to period. The majority of the increase, $1.7
million, resulted from a full period of real estate taxes on 1998
acquisitions and a partial period of real estate taxes on 1999 acquisitions,
net of dispositions. Property operating and leasing costs increased slightly.
However, property operating and leasing costs as a percentage of total
revenues decreased from 12.710.9% to 10.512.2% when comparing the second
quarter of 1998 to the second quarter of 1999 due mainly to efficiencies
realized by the Company.
General and administrative expenses decreased slightly when comparing periods
despite the growth of the Company. As a percentage of total revenues, general
and administrative expenses decreased from 3.76% to 2.89% when comparing the
first half of 1998 to the first half of 1999 due to efficiencies realized by
the Company.
Depreciation and amortization increased by $3.3 million due to a full period
of depreciation on 1998 acquisitions and partial period depreciation on 1999
acquisitions.
Interest incurred increased by approximately $3.4 million over the same
period last year due to higher average balances outstanding in the second
quarter of 1999 compared to 1998.
Other income (expenses) decreased when comparing periods. In the first
quarter of 1998, the Company incurred gains on the sale of sold four
properties for a gain. In the first quarter of 1999, the Company sold one
property for a gain which was much lower than the total gain in the prior
period. Due to the refinancing of debt for the Lake Shore Dunes Apartments,
the Company wrote off unamortized financing costs related to the early
extinguishment of the original debt of $0.6 million.
NET INCOME AND OTHER MEASURES OF OPERATIONS
Net income increaseddecreased $2.31.5 million or 13.2% due to income from
operations of net new investments in warehouse/industrial real estate and the
increased income from property sales, leasing and other merchant activity.
Funds from operations (FFO) increased 30.916.1% from $23.34.9 million to
$30.5 from the first half of 1998 to the first half of 1999.
When comparing the first half results of operations of properties owned at
January 1, 1998 with the results of operations of the same properties for the
first half of 1999 (the "same property" portfolio), the Company recognized an
increase of approximately 4.8% in net operating income. This same store
increase was due to the timely lease up of vacant space, rental increases on
renewed leases and contractual increases in minimum rent under leases in
place.
The net revenue margin for the first half of 1999 was 87.1% compared with
87.1% for the same period last year. The margin was in line with the
Company's expectations.
16
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
OPERATING AND INVESTMENT CASH FLOW
Cash flow generated from Company operations has historically been utilized
for working capital purposes and distributions, while proceeds from
financings and capital raises have been used to fund acquisitions and other
capital costs. However, cash flow from operations during the first six months
of 1999 of $33.83 million net of $22.3 million of 1999 distributions provided
$11.5$ million of retained capital. The Company expects retained capital to
fund a portion of future investment activities.
For the first six months of 1999, the Company's investment activities include
acquisitions of $87.8 million, advances for construction in progress of $16.2
million, and improvements and additions to properties of $13.6 million. These
activities were funded with dispositions of real estate of $2.92.9 million,
repayment of mortgage notes receivable of $19.5 million, advances on the
company's line of credit and a portion of the Company's retained capital.
Advances on the Company's line of credit also funded advances to affiliates
of $41.6 million for construction in progress.
EQUITY AND SHARE ACTIVITY
During the first six months of 1999, the Company paid distributions on common
shares of $18.7 million or $0.95 per share and on class B common shares of
$0.4 million or $0.974 per share. Also, in 1999, the Company paid dividends
on Series A Preferred Shares of $3.2 million or $1.06 per share and accrued
$0.1 million for dividends on Series B Convertible Preferred Shares. The
following factors, among others, will affect the future availability of funds
for distribution: (i) scheduled increases in base rents under existing
leases, (ii) changes in minimum base rents attributable to replacement of
existing leases with new or replacement leases and (iii) restrictions under
certain covenants of the Company's unsecured line of credit.
DEBT CAPACITY
The Company has a $250 million unsecured credit facility co-led by Bank One
and Bank of America. As of August 12, 1999, the Company had outstanding
borrowings of approximately $138 million under the Company's unsecured line
of credit (approximately 10.4% of the Company's fully diluted total market
capitalization), and the Company had remaining availability of approximately
$112 million under its unsecured line of credit.
At June 30, 1999, the Company's debt constituted approximately 34.34% of its
fully diluted total market capitalization. Also, the Company's debt service
coverage ratio remained high at 4.6 to 1, and the Company's fixed charge
coverage ratio was 3.4 to 1 due to preferred dividends. The Company's fully
diluted common equity market capitalization was approximately $755 million, and
its fully diluted total market capitalization exceeded $1.3 billion. The
Company's leverage ratios benefited during the
17
<PAGE>
first three months of 1999 from the conversion of approximately $0.5 million
of its 8.22% Convertible Subordinated Debentures, due 2004, to 27,778 common
shares.
Standard and Poors, Duff & Phelps Credit Rating Co. and Moody's Investors
Service's have assigned investment grade ratings to the Company's convertible
subordinated notes and senior unsecured debt and preferred stock issuable
under the Company's shelf registration statement.
The Company has considered it's short-term (one year or less) capital needs,
in conjunction with its estimated future cash flow from operations and other
expected sources. The Company believes that its ability to fund operating
expenses, building improvements, debt service requirements and the minimum
distribution required to maintain the Company's REIT qualification under the
Internal Revenue Code, will be met by recurring operating and investment
revenue and other real estate income.
Long-term (greater than one year) capital needs for property acquisitions,
scheduled debt maturities, major redevelopment projects, expansions, and
construction of build-to-suit properties will be supported, initially, by
draws on the Company's unsecured line of credit, followed by the issuance of
long-term unsecured indebtedness and the issuance of equity securities.
Management expects that a significant portion of the Company's investment
funds will be supplied by the proceeds of property and investment
dispositions.
YEAR 2000 COMPLIANCE
In response to the Year 2000 issue, the Company initiated a project in early
1997 to identify, evaluate and implement a new computerized real estate
management system. The Company is addressing the issue through a combination
of modifications to existing programs and conversion to Year 2000 compliant
software. In addition, the Company is discussing with its tenants, vendors,
and other service providers the possibility of any interface difficulties
relating to the Year 2000 issue which may affect the Company. If the Company
and those it conducts business with do not make modifications or conversions
in a timely manner, the Year 2000 issue may have a material adverse effect on
the Company's business, financial condition, and results of operations. The
total cost associated with the required modifications is not expected to be
material to the Company's consolidated results of operations, liquidity and
financial position, and is being expensed as incurred.
SUBSEQUENT EVENTS
On August 12, 1999, the Company announced the redemption of all of its
outstanding 8.22% Convertible Subordinate Debentures due 2004 ($6,948,000
principle amount of Debentures is currently outstanding). The redemption will
occur on September 24, 1999 and will be at par with interest accrued to the
redemption date. The Paying Agent will be The First National Bank of Chicago.
RECENT PRONOUNCEMENTS
18
<PAGE>
In May, 1998, the FASB issued SFAS Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement, effective for
financial statements for fiscal years beginning after June 15, 2000, provides
a comprehensive and consistent standard for the recognition and measurement
of derivatives and hedging activities. The Company currently has no
derivatives outstanding.
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q/A contains forward looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. The
Company's actual results could differ materially from those set forth in the
forward looking statements as a result of various factors, including, but not
limited to, uncertainties affecting real estate businesses generally (such as
entry into new leases, renewals of leases and dependence on tenants' business
operations), risks relating to acquisition, construction and development
activities, possible environmental liabilities, risks relating to leverage,
debt service and obligations with respect to the payment of dividends
(including availability of financing terms acceptable to the Company and
sensitivity of the Company's operations to fluctuations in interest rates),
the potential for the need to use borrowings to make distributions necessary
for the Company to qualify as a REIT, dependence on the primary market in
which the Company's properties are located, the existence of complex
regulations relating to the Company's status as a REIT, the failure of the
Company and entities the Company does business with to make necessary
modifications and conversions to Year 2000 compliant software in a timely
manner and the potential adverse impact of the market interest rates on the
cost of borrowings by the Company and on the market price for the Company's
securities.
19
<PAGE>
ITEM 3 QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The Company assesses its risk in relation to market conditions, and a
discussion about the Company's exposure to possible changes in market
conditions follows. This discussion involves the effect on earnings, cash
flows and the value of the Company's financial instruments as a result of
possible future market conditions changes. The discussions below include
"forward looking statements" regarding market risk, but management is not
forecasting the occurrence of these market changes. The actual earnings and
cash flows of the Company may differ materially these projections discussed
below.
At June 30, 1999, $111.6 million or 35.7% of the Company's debt was variable
rate debt and $300,450 million or 64.3% of the debt was fixed rate debt.
Based on the amount of variable debt outstanding as of June 30, 1999, a 10%
increase or decrease in the Company's interest rate on the Company's variable
rate debt would decrease or increase, respectively, future earnings and cash
flows by approximately $868.8 million per year. A similar change in interest
rates on the Company's fixed rate debt would not increase or decrease the
future earnings of the Company during the term of the debt, but would effect
the fair value of the debt. An increase in interest rates would decrease the
fair value of the Company's fixed rate debt.
The Company is subject to other non-quantifiable market risks due to the
nature of its business. The business of owning and investing in real estate
is highly competitive. Sever factors may adversely affect the economic
performance and value or our properties and the Company. These factors
include:
- Adverse changes in general or local economic conditions affecting
real estate values, rental rates, interest rates, real estate tax
rates and other operating expenses.
- Competitive overbuilding.
- Our inability to keep high levels of occupancy in our properties.
- Tenant defaults.
- Unfavorable changes in governmental rules and fiscal policies
(including rent control legislation).
- Our ability to sell properties.
- Acts of God and other factors that are beyond our control.
20
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Exhibit 27 - Financial Data Schedule
(2) Exhibit 99 - Press release dated September 28, 1999.
On August 16, 1999, the Company filed with the Commission a current report on
Form 8-K/A No. 1 to report proforma financial information and financial
statements which were not reported on the Form 8-K filed on June 15, 1999,
which reported the acquisition by the Company of properties and its
consolidated subsidiaries between March 11, 1999 and June 15, 1999.
On June 21, 1999, the Company filed with the Commission a current report on
Form 8-K relating to the issuance and sale of up to 1,000,000 shares of the
Company's 7.5% Series B Convertible Cumulative Redeemable Preferred Shares
pursuant to a Regulation S-K, Item 601 (b) in lieu of filing the otherwise
required exhibits to the registration statement on Form S-3 of the
Registrant, file no. 333-49359.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CENTERPOINT PROPERTIES TRUST
a Maryland Company
By: /s/ Paul S. Fisher
--------------------------------
Paul S. Fisher
Executive Vice President and
Chief Financial Officer
December 29, 1999 (Principal Accounting Officer)
22
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 30,859
<SECURITIES> 0
<RECEIVABLES> 21,733
<ALLOWANCES> 573
<INVENTORY> 0
<CURRENT-ASSETS> 108,886
<PP&E> 889,986
<DEPRECIATION> 74,533
<TOTAL-ASSETS> 976,931
<CURRENT-LIABILITIES> 56,109
<BONDS> 467,050
0
4
<COMMON> 20
<OTHER-SE> 453,748
<TOTAL-LIABILITY-AND-EQUITY> 976,931
<SALES> 0
<TOTAL-REVENUES> 65,650
<CGS> 0
<TOTAL-COSTS> 45,960
<OTHER-EXPENSES> (421)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,339
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 582
<CHANGES> 0
<NET-INCOME> 16,277
<EPS-BASIC> .81
<EPS-DILUTED> .80
</TABLE>
<PAGE>
1808 SWIFT DRIVE
OAK BROOK, ILLINOIS 60523-1501
[CENTERPOINT LOGO] PHONE: 630.586.8000
FAX: 630.586.8010
WWW.CENTERPOINT-PROP.COM
NEWS RELEASE
CONTACT AT THE COMPANY:
---------------------------------------------------------------------
John S. Gates, Jr. Rhonda Mork
CEO & President Director of External Affairs
630-586-8000 630-586-8101
[email protected]
FOR IMMEDIATE RELEASE
SEPTEMBER 28, 1999
CENTERPOINT REPORTS RESTATEMENT OF
1997, 1998 AND 1999 FINANCIAL RESULTS;
CUMULATIVE NET INCOME INCREASES BY $2.1 MILLION
CUMULATIVE FFO INCREASES $0.03 PER SHARE FOR THE SAME PERIODS
OAK BROOK, SEPTEMBER 28, 1999. CenterPoint Properties Trust (NYSE: CNT)
announced today that the Company is restating previously audited results for the
years 1997 and 1998, as well as the unaudited first two quarters of 1999. The
Company's independent accountants, PricewaterhouseCoopers ("PwC"), are in
concurrence with these reported changes. The restatement, which concerns gain
recognition related to completed property sales, results in a cumulative
increase in net income of $2.1 million over previously reported net income.
Cumulative Funds From Operations ("FFO") increases $0.7 million, equal to $0.03
per share.
CenterPoint President and CEO, John Gates, emphasized that the restatement will
not affect the Company's business or strategy. "This is a technical reporting
change. It has no impact whatsoever on the economics of the sales involved and
will have no impact on anticipated future selling. CenterPoint is committed to
our strategy of recycling capital through sales and the Company's business
prospects remain exceptionally strong."
The restatement reflects the recognition of gains, not previously reported,
related to certain completed sales structured as tax-deferred exchanges under
Section 1031 of the Internal Revenue Code, where gains were not reported for tax
purposes. Secondly, the restatement reflects the retiming of gain recognition
from other completed property sales related to the Company's development
activity. While the timing of reported gains from these latter transactions has
been shifted, the aggregate gain remains unchanged and no cash or tax effect has
resulted.
As part of the restatement, $3.5 million in net income originally reported in
1998 will be shifted into the third quarter of 1999. Other than this shift,
management expects third quarter 1999 results to be in line with current
expectations.
Stated Gates, "In the final analysis, when CenterPoint reports its third quarter
results, cumulative retained earnings will be $2.1 million higher than
heretofore anticipated."
<PAGE>
BACKGROUND
On August 9, 1999, CenterPoint announced that, based on a recommendation by its
independent accountants, PricewaterhouseCoopers, it was shifting $1.5 million of
net income from the second quarter of 1999 to the third quarter of 1999.
Although the shift had no effect on the full year results, the August 9th
release specified that the independent accountants would review prior, similar
transactions. Based on the results of the review, which is now complete, the
Company is restating the affected periods from 1997 to 1999.
Revised quarterly statements follow (6 pages).
CENTERPOINT PROPERTIES TRUST
Statements in this release, which are not historical, may be deemed
forward-looking statements under federal securities laws. There can be not
assurance that future results will be achieved and actual results could defer
materially from forecasts and estimates. Factors that could cause actual results
to differ materially are general business and economic conditions, completion of
pending acquisitions, competitive market conditions, weather, pricing of debt
and equity capital markets and other risks inherent in the real estate business.
CenterPoint is a publicly traded real estate investment trust (REIT). It is the
largest industrial property company in the 1.25 billion square foot Chicago
regional market, with a current portfolio of approximately 30 million square
feet and an additional 605 acres of land upon which 12.2 million square feet
could be developed. The Company is focused on providing unsurpassed tenant
satisfaction and adding value to its shareholders through customer driven
management, investment, development and redevelopment of warehouse/industrial
facilities. The first major REIT to focus on the industrial property sector,
CenterPoint has a current total market capitalization of approximately $1.3
billion.
###
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
MARCH 31, 1997
(UNAUDITED)
------------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $80,299 $ - $80,299
Buildings 289,867 - 289,867
Building improvements 45,063 - 45,063
Furniture, fixtures, and equipment 10,885 - 10,885
Construction in progress 18,522 4,557 23,079
------------------------------------------
444,636 4,557 449,193
Less accumulated
depreciation and amortization 33,328 - 33,328
------------------------------------------
Net investment in real estate 411,308 4,557 415,865
Cash and cash equivalents 6,585 - 6,585
Restricted cash and cash equivalents 396 - 396
Tenant accounts receivable, net 12,440 - 12,440
Mortgage notes receivable 19,809 (4,557) 15,252
Investment in and advances to affiliate 15,664 - 15,664
Prepaid expenses and other assets 3,404 60 3,464
Deferred expenses, net 4,262 - 4,262
------------------------------------------
$473,868 $ 60 $473,928
==========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $111,917 $ - $111,917
Senior unsecured debt - - -
Tax-exempt debt - - -
Line of credit 7,500 - 7,500
Convertible subordinated debentures
payable 12,135 - 12,135
Preferred dividends payable - - -
Accounts payable 3,498 - 3,498
Accrued expenses 18,576 - 18,576
Rents received in advance and
security deposits 4,008 - 4,008
------------------------------------------
157,634 - 157,634
------------------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value - - -
Common stock, $.001 par value 17 - 17
Class B common stock, $.001 par value 2 - 2
Additional paid-in-capital 345,982 - 345,982
Retained earnings(deficit) (29,105) 60 (29,045)
Unearned compensation - restricted stock (662) - (662)
------------------------------------------
Total stockholders' equity 316,234 60 316,294
------------------------------------------
$473,868 $ 60 $473,928
==========================================
</TABLE>
<TABLE>
<CAPTION>
JUNE 30,1997 SEPTEMBER 30, 1997
(UNAUDITED) (UNAUDITED)
---------------------------------------------------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $86,407 $ 997 $87,404 $ 90,411 $ 997 $ 91,408
Buildings 321,846 3,989 325,835 357,868 3,989 361,857
Building improvements 50,029 - 50,029 60,119 - 60,119
Furniture, fixtures, and equipment 11,284 - 11,284 12,983 - 12,983
Construction in progress 19,812 - 19,812 17,332 4,928 22,260
------------------------------------ ---------------------------------
489,378 4,986 494,364 538,713 9,914 548,627
Less accumulated
depreciation and amortization 36,404 - 36,404 40,406 - 40,406
------------------------------------ ---------------------------------
Net investment in real estate 452,974 4,986 457,960 498,307 9,914 508,221
Cash and cash equivalents 2,006 - 2,006 13,866 - 13,866
Restricted cash and cash equivalents 866 - 866 40,279 - 40,279
Tenant accounts receivable, net 13,153 - 13,153 14,071 - 14,071
Mortgage notes receivable 20,225 (4,986) 15,239 19,584 (9,914) 9,670
Investment in and advances to affiliate 15,120 (36) 15,084 32,957 (36) 32,921
Prepaid expenses and other assets 3,412 27 3,439 4,647 (281) 4,366
Deferred expenses, net 4,481 - 4,481 5,611 - 5,611
------------------------------------ ---------------------------------
$512,237 $ (9) $512,228 $629,322 $ (317) $629,005
==================================== =================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $111,892 $ - $111,892 $166,865 $ - $166,865
Senior unsecured debt - - - - - -
Tax-exempt debt 42,550 - 42,550 103,250 - 103,250
Line of credit - - - 11,790 - 11,790
Convertible subordinated debentures
payable 12,055 - 12,055 83 - 83
Preferred dividends payable - - - - - -
Accounts payable 5,163 - 5,163 11,315 - 11,315
Accrued expenses 21,722 150 21,872 17,171 150 17,321
Rents received in advance and
security deposits 3,483 - 3,483 4,196 - 4,196
------------------------------------ ---------------------------------
196,865 150 197,015 314,670 150 314,820
------------------------------------ ---------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value - - - - - -
Common stock, $.001 par value 17 - 17 17 - 17
Class B common stock, $.001 par value 2 - 2 2 - 2
Additional paid-in-capital 345,850 - 345,850 346,377 - 346,377
Retained earnings(deficit) (29,964) (159) (30,123) (31,241) (467) (31,708)
Unearned compensation - restricted stock (533) - (533) (503) - (503)
------------------------------------ ---------------------------------
Total stockholders' equity 315,372 (159) 315,213 314,652 (467) 314,185
------------------------------------ ---------------------------------
$512,237 $ (9) $512,228 $629,322 $ (317) $629,005
==================================== =================================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $123,014 $ 997 $124,011
Buildings 414,314 3,989 418,303
Building improvements 64,372 - 64,372
Furniture, fixtures, and equipment 13,912 - 13,912
Construction in progress 26,034 15,643 41,677
-----------------------------------------
641,646 20,629 662,275
Less accumulated
depreciation and amortization 44,352 - 44,352
-----------------------------------------
Net investment in real estate 597,294 20,629 617,923
Cash and cash equivalents 1,652 - 1,652
Restricted cash and cash equivalents 36,509 - 36,509
Tenant accounts receivable, net 12,416 - 12,416
Mortgage notes receivable 30,297 (20,629) 9,668
Investment in and advances to affiliate 11,143 (36) 11,107
Prepaid expenses and other assets 3,303 (184) 3,119
Deferred expenses, net 6,661 - 6,661
-----------------------------------------
$699,275 $ (220) $699,055
=========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $85,755 $ - $85,755
Senior unsecured debt - - -
Tax-exempt debt 75,540 - 75,540
Line of credit 97,700 - 97,700
Convertible subordinated debentures
payable 11,740 - 11,740
Preferred dividends payable 901 - 901
Accounts payable 10,311 - 10,311
Accrued expenses 24,443 150 24,593
Rents received in advance and
security deposits 4,759 - 4,759
-----------------------------------------
311,149 150 311,299
-----------------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3
Common stock, $.001 par value 17 - 17
Class B common stock, $.001 par value 2 - 2
Additional paid-in-capital 420,743 - 420,743
Retained earnings(deficit) (32,142) (370) (32,512)
Unearned compensation - restricted stoc (497) - (497)
-----------------------------------------
Total stockholders' equity 388,126 (370) 387,756
-----------------------------------------
$699,275 $ (220) $699,055
=========================================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
MARCH 31, 1997 (UNAUDITED) JUNE 30, 1997 (UNAUDITED)
------------------------------------- ------------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 12,771 $ - $ 12,771 $ 13,540 $ 66 $ 13,606
Straight-line rents 654 - 654 633 - 633
Expense reimbursements 4,895 - 4,895 4,480 - 4,480
Mortgage interest income 655 60 715 524 1 525
------------------------------------- ------------------------------------
Total operating and investment revenue 18,975 60 19,035 19,177 67 19,244
------------------------------------- ------------------------------------
Other revenue:
Fee income 802 - 802 813 (250) 563
Equity in net income of affiliate (48) - (48) 140 (36) 104
------------------------------------- ------------------------------------
Total other revenue 754 - 754 953 (286) 667
------------------------------------- ------------------------------------
Total revenue 19,729 60 19,789 20,130 (219) 19,911
------------------------------------- ------------------------------------
Expenses:
Real estate taxes 4,270 - 4,270 4,097 - 4,097
Property operating and leasing 3,023 - 3,023 2,424 - 2,424
General and administrative 703 - 703 739 - 739
Depreciation and amortization 3,210 - 3,210 3,379 - 3,379
Interest expense:
Interest incurred, net 2,626 - 2,626 2,246 - 2,246
Amortization of deferred financing costs 192 - 192 203 - 203
------------------------------------- ------------------------------------
Total expenses 14,024 - 14,024 13,088 - 13,088
------------------------------------- ------------------------------------
Operating income 5,705 60 5,765 7,042 (219) 6,823
Other income (expense)
Gain or (loss) on sale of real estate - - - - - -
Other income (34) - (34) 101 - 101
------------------------------------- ------------------------------------
Income before extraordinary item 5,671 60 5,731 7,143 (219) 6,924
Extraordinary item, early extinguishment of debt - - - - - -
------------------------------------- ------------------------------------
Net income 5,671 60 5,731 7,143 (219) 6,924
Preferred Dividends - - - - - -
------------------------------------- ------------------------------------
Net income available to common shareholders $ 5,671 $ 60 $ 5,731 $ 7,143 $ (219) $ 6,924
===================================== ====================================
Net income available to common shareholders per share
Basic $ 0.33 $ 0.00 $ 0.33 $ 0.38 $ (0.01) $ 0.36
Diluted $ 0.32 $ 0.00 $ 0.33 $ 0.37 $ (0.01) $ 0.36
Funds from operations
Add back:
Depreciation and amortization 3,210 - 3,210 3,379 - 3,379
Amortization of deferred financing - - - - - -
costs on debentures 13 - 13 12 - 12
Convertible subordinated debenture interest 266 - 266 248 - 248
------------------------------------- ------------------------------------
Funds from operations $ 9,160 $ 60 $ 9,220 $ 10,782 $ (219) $ 10,563
------------------------------------- ------------------------------------
Funds from operations per share $ 0.51 $ 0.00 $ 0.51 $ 0.55 $ (0.01) $ 0.54
===================================== ====================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1997 (UNAUDITED) DECEMBER 31, 1997 (UNAUDITED)
----------------------------------- -----------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 14,544 $ 137 $ 14,681 $ 16,663 $ 156 $ 16,819
Straight-line rents 566 - 566 878 - 878
Expense reimbursements 4,283 - 4,283 4,570 - 4,570
Mortgage interest income 447 (50) 397 520 (59) 461
------------------------------------ ------------------------------------
Total operating and investment revenue 19,840 87 19,927 22,631 97 22,728
------------------------------------ ------------------------------------
Other revenue:
Fee income 455 (395) 60 1,090 - 1,090
Equity in net income of affiliate 1,264 - 1,264 818 - 818
------------------------------------ ------------------------------------
Total other revenue 1,719 (395) 1,324 1,908 - 1,908
------------------------------------ ------------------------------------
Total revenue 21,559 (308) 21,251 24,539 97 24,636
------------------------------------ ------------------------------------
Expenses:
Real estate taxes 4,187 - 4,187 4,537 - 4,537
Property operating and leasing 2,847 - 2,847 3,798 - 3,798
General and administrative 783 - 783 880 - 880
Depreciation and amortization 4,179 - 4,179 4,511 - 4,511
Interest expense:
Interest incurred, net 2,687 - 2,687 2,512 - 2,512
Amortization of deferred financing costs 193 - 193 211 - 211
------------------------------------ ------------------------------------
Total expenses 14,876 - 14,876 16,449 - 16,449
------------------------------------ ------------------------------------
Operating income 6,683 (308) 6,375 8,090 97 8,187
Other income (expense)
Gain or (loss) on sale of real estate - - - - - -
Other income 59 - 59 (17) - (17)
------------------------------------ ------------------------------------
Income before extraordinary item 6,742 (308) 6,434 8,073 97 8,170
Extraordinary item, early extinguishment of debt - - - - - -
------------------------------------ ------------------------------------
Net income 6,742 (308) 6,434 8,073 97 8,170
Preferred Dividends - - - (901) - (901)
------------------------------------ ------------------------------------
Net income available to common shareholders $ 6,742 $ (308) $ 6,434 $ 7,172 $ 97 $ 7,269
==================================== ====================================
Net income available to common shareholders per share
Basic $ 0.35 $ (0.02) $ 0.34 $ 0.38 $ 0.01 $ 0.38
Diluted $ 0.35 $ (0.02) $ 0.33 $ 0.37 $ 0.01 $ 0.38
Funds from operations
Add back:
Depreciation and amortization 4,179 - 4,179 4,511 - 4,511
Amortization of deferred financing - - - - - -
costs on debentures 12 - 12 12 - 12
Convertible subordinated debenture interest 243 - 243 242 - 242
------------------------------------ ------------------------------------
Funds from operations $ 11,176 $ (308) $ 10,868 $ 11,937 $ 97 $ 12,034
------------------------------------ ------------------------------------
Funds from operations per share $ 0.57 $ (0.02) $ 0.55 $ 0.60 $ 0.00 $ 0.61
==================================== ====================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1997
------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 57,519 $ 359 $ 57,878
Straight-line rents 2,732 - 2,732
Expense reimbursements 18,228 - 18,228
Mortgage interest income 2,146 (48) 2,098
-------------------------------------
Total operating and investment revenue 80,625 311 80,936
-------------------------------------
Other revenue:
Fee income 3,159 (645) 2,514
Equity in net income of affiliate 2,174 (36) 2,138
-------------------------------------
Total other revenue 5,333 (681) 4,652
-------------------------------------
Total revenue 85,958 (370) 85,588
-------------------------------------
Expenses:
Real estate taxes 17,091 - 17,091
Property operating and leasing 12,091 - 12,091
General and administrative 3,105 - 3,105
Depreciation and amortization 15,278 - 15,278
Interest expense:
Interest incurred, net 10,071 - 10,071
Amortization of deferred financing costs 800 - 800
-------------------------------------
Total expenses 58,436 - 58,436
-------------------------------------
Operating income 27,522 (370) 27,152
Other income (expense)
Gain or (loss) on sale of real estate - - -
Other income 108 - 108
-------------------------------------
Income before extraordinary item 27,630 (370) 27,260
Extraordinary item, early extinguishment of debt - - -
-------------------------------------
Net income 27,630 (370) 27,260
Preferred Dividends (901) - (901)
-------------------------------------
Net income available to common shareholders $ 26,729 $ (370) $26,359
=====================================
Net income available to common shareholders per share
Basic $ 1.43 $ (0.02) $ 1.41
Diluted $ 1.41 $ (0.02) $ 1.39
Funds from operations
Add back:
Depreciation and amortization 15,278 - 15,278
Amortization of deferred financing - - -
costs on debentures 48 - 48
Convertible subordinated debenture interest 999 - 999
-------------------------------------
Funds from operations $ 43,054 $ (370) $42,684
-------------------------------------
Funds from operations per share $ 2.23 $ (0.02) $ 2.21
=====================================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
MARCH 31, 1998 JUNE 30, 1998
(UNAUDITED) (UNAUDITED)
--------------------------------- ---------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $120,764 $ 278 $121,042 $126,280 $ 4,007 $130,287
Buildings 412,495 1,113 413,608 435,096 16,029 451,125
Building improvements 66,507 - 66,507 70,542 - 70,542
Furniture, fixtures, and equipment 14,854 - 14,854 16,561 - 16,561
Construction in progress 18,849 17,720 36,569 20,453 - 20,453
---------------------------------- ---------------------------------
633,469 19,111 652,580 668,932 20,036 688,968
Less accumulated depreciation and amortization 46,837 - 46,837 51,704 - 51,704
---------------------------------- ---------------------------------
Net investment in real estate 586,632 19,111 605,743 617,228 20,036 637,264
Cash and cash equivalents 637 - 637 2,039 - 2,039
Restricted cash and cash equivalents 57,765 - 57,765 33,828 - 33,828
Tenant accounts receivable, net 15,027 - 15,027 17,492 - 17,492
Mortgage notes receivable 27,887 (17,720) 10,167 28,802 (18,634) 10,168
Investment in and advances to affiliate 11,513 (266) 11,247 17,885 (1,314) 16,571
Prepaid expenses and other assets 4,789 (635) 4,154 7,883 (989) 6,894
Deferred expenses, net 6,878 - 6,878 8,000 - 8,000
---------------------------------- ---------------------------------
$711,128 $ 490 $711,618 $733,157 $ (901) $732,256
================================== =================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $85,755 $ - $85,755 $185,755 $ - $185,755
Senior unsecured debt - - - - - -
Tax-exempt debt 75,540 - 75,540 75,540 - 75,540
Line of credit 103,500 - 103,500 12,500 - 12,500
Convertible subordinated debentures payable 11,163 - 11,163 9,613 - 9,613
Preferred dividends payable 1,060 - 1,060 1,060 - 1,060
Accounts payable 5,501 - 5,501 3,714 - 3,714
Accrued expenses 23,407 - 23,407 28,219 - 28,219
Rents received in advance and security deposits 5,904 - 5,904 4,535 - 4,535
---------------------------------- ---------------------------------
311,830 - 311,830 320,936 - 320,936
---------------------------------- ---------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3 3 - 3
Common stock, $.001 par value 17 - 17 18 - 18
Class B common stock, $.001 par value 2 - 2 2 - 2
Additional paid-in-capital 433,171 - 433,171 447,352 - 447,352
Retained earnings(deficit) (33,447) 490 (32,957) (34,761) (901) (35,662)
Unearned compensation - restricted stock (448) - (448) (393) - (393)
---------------------------------- ---------------------------------
Total stockholders' equity 399,298 490 399,788 412,221 (901) 411,320
---------------------------------- ---------------------------------
$711,128 $ 490 $711,618 $733,157 $ (901) $732,256
================================== =================================
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
(UNAUDITED) DECEMBER 31, 1998
--------------------------------- ---------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $138,298 $ 4,028 $142,326 $128,045 $ 4,225 $132,270
Buildings 488,704 16,111 504,815 487,996 16,899 504,895
Building improvements 80,082 - 80,082 94,474 - 94,474
Furniture, fixtures, and equipment 17,564 - 17,564 18,817 - 18,817
Construction in progress 13,472 - 13,472 18,401 - 18,401
--------------------------------- ---------------------------------
738,120 20,139 758,259 747,733 21,124 768,857
Less accumulated depreciation and amortization 56,728 - 56,728 62,257 - 62,257
--------------------------------- ---------------------------------
Net investment in real estate 681,392 20,139 701,531 685,476 21,124 706,600
Cash and cash equivalents 4,696 - 4,696 475 - 475
Restricted cash and cash equivalents 31,545 - 31,545 33,056 - 33,056
Tenant accounts receivable, net 19,062 - 19,062 18,067 - 18,067
Mortgage notes receivable 19,655 (18,737) 918 20,353 (19,452) 901
Investment in and advances to affiliate 21,534 (2,702) 18,832 48,564 (4,768) 43,796
Prepaid expenses and other assets 6,025 (1,063) 4,962 5,264 (1,234) 4,030
Deferred expenses, net 8,607 - 8,607 10,681 - 10,681
--------------------------------- ---------------------------------
$792,516 $ (2,363) $790,153 $821,936 $ (4,330) $817,606
================================= =================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $106,225 $ - $106,225 $103,520 $ - 103,520
Senior unsecured debt 100,000 - 100,000 100,000 - 100,000
Tax-exempt debt 75,540 - 75,540 75,540 - 75,540
Line of credit 44,000 - 44,000 77,600 - 77,600
Convertible subordinated debentures payable 8,583 - 8,583 8,058 - 8,058
Preferred dividends payable 1,060 - 1,060 1,060 - 1,060
Accounts payable 4,633 - 4,633 7,986 - 7,986
Accrued expenses 34,420 - 34,420 30,810 250 31,060
Rents received in advance and security deposits 5,372 - 5,372 5,323 - 5,323
--------------------------------- ---------------------------------
379,833 - 379,833 409,897 250 410,147
--------------------------------- ---------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3 3 - 3
Common stock, $.001 par value 18 - 18 19 - 19
Class B common stock, $.001 par value 2 - 2 1 - 1
Additional paid-in-capital 448,606 - 448,606 449,229 - 449,229
Retained earnings(deficit) (35,602) (2,363) (37,965) (36,917) (4,580) (41,497)
Unearned compensation - restricted stock (344) - (344) (296) - (296)
--------------------------------- ---------------------------------
Total stockholders' equity 412,683 (2,363) 410,320 412,039 (4,580) 407,459
--------------------------------- ---------------------------------
$792,516 $ (2,363) $790,153 $821,936 $ (4,330) $817,606
================================= =================================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
MARCH 31, 1998 (UNAUDITED) JUNE 30, 1998 (UNAUDITED)
-------------------------------- ---------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 17,747 $ 56 $ 17,803 $ 18,050 $ 530 $ 18,580
Straight-line rents 1,364 - 1,364 1,157 - 1,157
Expense reimbursements 5,458 - 5,458 6,115 - 6,115
Mortgage interest income 656 (101) 555 679 (434) 245
-------------------------------- ---------------------------------
Total operating and investment revenue 25,225 (45) 25,180 26,001 96 26,097
-------------------------------- ---------------------------------
Other revenue:
Fee income 1,967 (256) 1,711 1,707 (1,110) 597
Equity in net income of affiliate 125 (230) (105) 275 (388) (113)
-------------------------------- ---------------------------------
Total other revenue 2,092 (486) 1,606 1,982 (1,498) 484
-------------------------------- ---------------------------------
Total revenue 27,317 (531) 26,786 27,983 (1,402) 26,581
-------------------------------- ---------------------------------
Expenses:
Real estate taxes 5,948 - 5,948 6,001 - 6,001
Property operating and leasing 3,542 - 3,542 3,210 - 3,210
General and administrative 990 - 990 1,001 - 1,001
Depreciation and amortization 4,696 - 4,696 5,186 - 5,186
Interest expense:
Interest incurred, net 2,928 - 2,928 3,056 - 3,056
Amortization of deferred financing costs 486 - 486 439 - 439
-------------------------------- ---------------------------------
Total expenses 18,590 - 18,590 18,893 - 18,893
-------------------------------- ---------------------------------
Operating income 8,727 (531) 8,196 9,090 (1,402) 7,688
Other income (expense)
Gain or (loss) on sale of real estate - 1,391 1,391 - 11 11
Other income (16) - (16) (21) - (21)
-------------------------------- ---------------------------------
Income before extraordinary item 8,711 860 9,571 9,069 (1,391) 7,678
Extraordinary item, early extinguishment of debt - - - - - -
-------------------------------- ---------------------------------
Net income 8,711 860 9,571 9,069 (1,391) 7,678
Preferred Dividends (1,590) - (1,590) (1,590) - (1,590)
-------------------------------- ---------------------------------
Net income available to common shareholders $ 7,121 $ 860 $ 7,981 $ 7,479 $ (1,391) $ 6,088
================================ =================================
Net income available to common shareholders per share
Basic $ 0.37 $ 0.04 $ 0.42 $ 0.37 $ (0.07) $ 0.30
Diluted $ 0.37 $ 0.04 $ 0.41 $ 0.37 $ (0.07) $ 0.30
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 4,696 - 4,696 5,186 - 5,186
Amortization of deferred financing
costs on debentures 11 - 11 10 - 10
Convertible subordinated debenture interest 233 - 233 205 - 205
Depreciation on sold properties - (1,064) (1,064) - - -
-------------------------------- ---------------------------------
Funds from operations $ 12,061 $ (204) $ 11,857 $ 12,880 $ (1,391) $ 11,489
-------------------------------- ---------------------------------
Funds from operations per share $ 0.61 $ (0.01) $ 0.60 $ 0.63 $ (0.07) $ 0.56
================================ =================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1998 (UNAUDITED) DECEMBER 31, 1998 (UNAUDITED)
-------------------------------- --------------------------------
REPORTED ADJUSTMENT RESTATED REPORTED ADJUSTMENT RESTATED
-------- ---------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 19,479 $ 530 $ 20,009 $20,487 $ 530 $ 21,017
Straight-line rents 742 - 742 767 - 767
Expense reimbursements 5,737 - 5,737 4,614 - 4,614
Mortgage interest income 600 (466) 134 637 (511) 126
-------------------------------- --------------------------------
Total operating and investment revenue 26,558 64 26,622 26,505 19 26,524
-------------------------------- --------------------------------
Other revenue:
Fee income 1,962 (1,118) 844 2,946 (2,440) 506
Equity in net income of affiliate 46 (408) (362) (210) (66) (276)
-------------------------------- --------------------------------
Total other revenue 2,008 (1,526) 482 2,736 (2,506) 230
-------------------------------- --------------------------------
Total revenue 28,566 (1,462) 27,104 29,241 (2,487) 26,754
-------------------------------- --------------------------------
Expenses:
Real estate taxes 5,786 - 5,786 4,484 - 4,484
Property operating and leasing 2,674 - 2,674 4,056 - 4,056
General and administrative 969 - 969 1,080 - 1,080
Depreciation and amortization 5,392 - 5,392 6,145 - 6,145
Interest expense:
Interest incurred, net 3,759 - 3,759 3,917 - 3,917
Amortization of deferred financing costs 409 - 409 482 - 482
-------------------------------- --------------------------------
Total expenses 18,989 - 18,989 20,164 - 20,164
-------------------------------- --------------------------------
Operating income 9,577 (1,462) 8,115 9,077 (2,487) 6,590
Other income (expense)
Gain or (loss) on sale of real estate - - - - 270 270
Other income (7) - (7) 30 - 30
-------------------------------- --------------------------------
Income before extraordinary item 9,570 (1,462) 8,108 9,107 (2,217) 6,890
Extraordinary item, early extinguishment of debt - - - - - -
-------------------------------- --------------------------------
Net income 9,570 (1,462) 8,108 9,107 (2,217) 6,890
Preferred Dividends (1,590) - (1,590) (1,590) - (1,590)
-------------------------------- --------------------------------
Net income available to common shareholders $ 7,980 $ (1,462) $ 6,518 $ 7,517 $ (2,217) $ 5,300
================================ ================================
Net income available to common shareholders per share
Basic $ 0.40 $ (0.07) $ 0.32 $ 0.37 $ (0.11) $ 0.26
Diluted $ 0.39 $ (0.07) $ 0.32 $ 0.37 $ (0.11) $ 0.26
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 5,392 - 5,392 6,145 - 6,145
Amortization of deferred financing
costs on debentures 9 - 9 8 - 8
Convertible subordinated debenture interest 180 - 180 166 - 166
Depreciation on sold properties - (286) (286) - - -
-------------------------------- --------------------------------
Funds from operations $ 13,561 $ (1,748) $ 11,813 $13,836 $ (2,217) $ 11,619
-------------------------------- --------------------------------
Funds from operations per share $ 0.66 $ (0.08) $ 0.57 $ 0.67 $ (0.11) $ 0.56
================================ ================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1998
----------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- ---------
<S> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $75,763 $ 1,646 $ 77,409
Straight-line rents 4,030 - 4,030
Expense reimbursements 21,924 - 21,924
Mortgage interest income 2,573 (1,512) 1,061
----------------------------------
Total operating and investment revenue 104,290 134 104,424
----------------------------------
Other revenue:
Fee income 8,581 (4,924) 3,657
Equity in net income of affiliate 237 (1,092) (855)
----------------------------------
Total other revenue 8,818 (6,016) 2,802
----------------------------------
Total revenue 113,108 (5,882) 107,226
----------------------------------
Expenses:
Real estate taxes 22,218 - 22,218
Property operating and leasing 13,482 - 13,482
General and administrative 4,041 - 4,041
Depreciation and amortization 21,418 - 21,418
Interest expense:
Interest incurred, net 13,659 - 13,659
Amortization of deferred financing costs 1,817 - 1,817
----------------------------------
Total expenses 76,635 - 76,635
----------------------------------
Operating income 36,473 (5,882) 30,591
Other income (expense)
Gain or (loss) on sale of real estate - 1,672 1,672
Other income (15) - (15)
----------------------------------
Income before extraordinary item 36,458 (4,210) 32,248
Extraordinary item, early extinguishment of debt - - -
----------------------------------
Net income 36,458 (4,210) 32,248
Preferred Dividends (6,360) - (6,360)
----------------------------------
Net income available to common shareholders $30,098 $ (4,210) $25,888
==================================
Net income available to common shareholders per share
Basic $1.51 $ (0.21) $ 1.30
Diluted $1.50 $ (0.21) $ 1.29
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 21,418 - 21,418
Amortization of deferred financing
costs on debentures 38 - 38
Convertible subordinated debenture interest 783 - 783
Depreciation on sold properties - (1,350) (1,350)
----------------------------------
Funds from operations 52,337 $ (5,560) 46,777
----------------------------------
Funds from operations per share $2.57 $ (0.27) $ 2.29
==================================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
MARCH 31, 1999
(UNAUDITED)
---------------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $131,996 $ 4,315 $136,311
Buildings 505,173 17,257 522,430
Building improvements 99,852 - 99,852
Furniture, fixtures, and equipment 18,855 - 18,855
Construction in progress 27,432 - 27,432
------------------------------------------
783,308 21,572 804,880
Less accumulated depreciation and amortization 67,821 - 67,821
------------------------------------------
Net investment in real estate 715,487 21,572 737,059
Cash and cash equivalents 45,577 - 45,577
Restricted cash and cash equivalents 29,324 - 29,324
Tenant accounts receivable, net 19,884 - 19,884
Mortgage notes receivable 20,348 (19,452) 896
Investment in and advances to affiliate 46,927 (3,454) 43,473
Prepaid expenses and other assets 6,902 (436) 6,466
Deferred expenses, net 12,434 - 12,434
------------------------------------------
$896,883 $ (1,770) $895,113
==========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $103,256 $ - $103,256
Senior unsecured debt 200,000 - 200,000
Tax-exempt debt 75,540 - 75,540
Line of credit 52,900 - 52,900
Convertible subordinated debentures payable 7,878 - 7,878
Preferred dividends payable 1,060 - 1,060
Accounts payable 6,705 - 6,705
Accrued expenses 32,694 - 32,694
Rents received in advance and security deposits 6,241 - 6,241
------------------------------------------
486,274 - 486,274
------------------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3
Common stock, $.001 par value 20 - 20
Class B common stock, $.001 par value - - -
Additional paid-in-capital 449,612 - 449,612
Retained earnings(deficit) (38,742) (1,770) (40,512)
Unearned compensation - restricted stock (284) - (284)
------------------------------------------
Total stockholders' equity 410,609 (1,770) 408,839
------------------------------------------
$896,883 $ (1,770) $895,113
==========================================
</TABLE>
<TABLE>
<CAPTION>
JUNE 30,1999
(UNAUDITED)
---------------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
ASSETS
Assets:
Investment in real estate:
Land $152,880 $ 425 $153,305
Buildings 585,638 1,695 587,333
Building improvements 107,353 - 107,353
Furniture, fixtures, and equipment 19,713 - 19,713
Construction in progress 22,282 - 22,282
------------------------------------------
887,866 2,120 889,986
Less accumulated depreciation and amortization 74,533 - 74,533
------------------------------------------
Net investment in real estate 813,333 2,120 815,453
Cash and cash equivalents 2,659 - 2,659
Restricted cash and cash equivalents 28,200 - 28,200
Tenant accounts receivable, net 21,733 - 21,733
Mortgage notes receivable 890 - 890
Investment in and advances to affiliate 90,364 (3,454) 86,910
Prepaid expenses and other assets 6,893 - 6,893
Deferred expenses, net 14,193 - 14,193
------------------------------------------
$978,265 $ (1,334) $976,931
==========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $92,899 $ - $92,899
Senior unsecured debt 200,000 - 200,000
Tax-exempt debt 55,000 - 55,000
Line of credit 111,600 - 111,600
Convertible subordinated debentures payable 7,551 - 7,551
Preferred dividends payable 1,132 - 1,132
Accounts payable 10,507 - 10,507
Accrued expenses 38,898 - 38,898
Rents received in advance and security deposits 5,572 - 5,572
------------------------------------------
523,159 - 523,159
------------------------------------------
Stockholders' equity:
Perferred Stock, $.001 par value 3 - 3
Common stock, $.001 par value 1 - 1
Class B common stock, $.001 par value 20 - 20
Additional paid-in-capital 498,371 - 498,371
Retained earnings(deficit) (43,017) (1,334) (44,351)
Unearned compensation - restricted stock (272) - (272)
------------------------------------------
Total stockholders' equity 455,106 (1,334) 453,772
------------------------------------------
$978,265 $ (1,334) $976,931
==========================================
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
(UNAUDITED)
------------------
ADJUSTMENT
----------
<S> <C>
ASSETS
Assets:
Investment in real estate:
Land $ 425
Buildings 1,695
Building improvements -
Furniture, fixtures, and equipment -
Construction in progress -
--------------------------
2,120
Less accumulated depreciation and amortization -
--------------------------
Net investment in real estate 2,120
Cash and cash equivalents -
Restricted cash and cash equivalents -
Tenant accounts receivable, net -
Mortgage notes receivable -
Investment in and advances to affiliate -
Prepaid expenses and other assets -
Deferred expenses, net -
--------------------------
$ 2,120
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt $ -
Senior unsecured debt -
Tax-exempt debt -
Line of credit -
Convertible subordinated debentures payable -
Preferred dividends payable -
Accounts payable -
Accrued expenses -
Rents received in advance and security deposits -
--------------------------
-
--------------------------
Stockholders' equity:
Perferred Stock, $.001 par value -
Common stock, $.001 par value -
Class B common stock, $.001 par value -
Additional paid-in-capital -
Retained earnings(deficit) 2,120
Unearned compensation - restricted stock -
--------------------------
Total stockholders' equity 2,120
--------------------------
$ 2,120
==========================
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 (UNAUDITED)
---------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 20,813 $ 530 $ 21,343
Straight-line rents 844 - 844
Expense reimbursements 6,568 - 6,568
Mortgage interest income 554 (510) 44
---------------------------------------
Total operating and investment revenue 28,779 20 28,799
---------------------------------------
Other revenue:
Fee income 2,701 1,688 4,389
Equity in net income of affiliate (246) 654 408
---------------------------------------
Total other revenue 2,455 2,342 4,797
---------------------------------------
Total revenue 31,234 2,362 33,596
---------------------------------------
Expenses:
Real estate taxes 6,565 - 6,565
Property operating and leasing 3,581 - 3,581
General and administrative 905 - 905
Depreciation and amortization 5,997 - 5,997
Interest expense:
Interest incurred, net 4,359 - 4,359
Amortization of deferred financing costs 458 - 458
---------------------------------------
Total expenses 21,865 - 21,865
---------------------------------------
Operating income 9,369 2,362 11,731
Other income (expense)
Gain or (loss) on sale of real estate - 448 448
Other income (20) - (20)
---------------------------------------
Income before extraordinary item 9,349 2,810 12,159
Extraordinary item, early extinguishment of debt - - -
---------------------------------------
Net income 9,349 2,810 12,159
Preferred Dividends (1,590) - (1,590)
---------------------------------------
Net income available to common shareholders $ 7,759 $ 2,810 $ 10,569
=======================================
Net income available to common shareholders per share
before extraordinary item
Basic $ 0.49 $ 0.15 $ 0.63
Diluted $ 0.48 $ 0.14 $ 0.62
Net income available to common shareholders per share
Basic $ 0.40 $ 0.15 $ 0.55
Diluted $ 0.40 $ 0.14 $ 0.54
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 5,997 - 5,997
Amortization of deferred financing
costs on debentures 8 - 8
Convertible subordinated debenture interest 161 - 161
Depreciation from unconsolidated
subsidiary, net of tax - - -
Extraordinary item, early extinquishment of debt - - -
Convertible preferred dividend - - -
Depreciation on sold properties - (99) (99)
---------------------------------------
Funds from operations $ 13,925 $ 2,711 $ 16,636
---------------------------------------
Funds from operations per share $ 0.68 $ 0.13 $ 0.81
=======================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JUNE 30, 1999 (UNAUDITED)
----------------------------------------
REPORTED ADJUSTMENT RESTATED
-------- ---------- --------
<S> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ 21,598 $ - $ 21,598
Straight-line rents 1,420 - 1,420
Expense reimbursements 6,229 - 6,229
Mortgage interest income 364 - 364
----------------------------------------
Total operating and investment revenue 29,611 - 29,611
----------------------------------------
Other revenue:
Fee income 1,542 436 1,978
Equity in net income of affiliate 465 - 465
----------------------------------------
Total other revenue 2,007 436 2,443
----------------------------------------
Total revenue 31,618 436 32,054
----------------------------------------
Expenses:
Real estate taxes 7,127 - 7,127
Property operating and leasing 3,282 - 3,282
General and administrative 940 - 940
Depreciation and amortization 7,223 - 7,223
Interest expense:
Interest incurred, net 5,018 - 5,018
Amortization of deferred financing costs 505 - 505
----------------------------------------
Total expenses 24,095 - 24,095
----------------------------------------
Operating income 7,523 436 7,959
Other income (expense)
Gain or (loss) on sale of real estate - - -
Other income (7) - (7)
----------------------------------------
Income before extraordinary item 7,516 436 7,952
Extraordinary item, early extinguishment of debt (582) - (582)
----------------------------------------
Net income 6,934 436 7,370
Preferred Dividends (1,662) - (1,662)
----------------------------------------
Net income available to common shareholders $ 5,272 $ 436 $ 5,708
========================================
Net income available to common shareholders per share
before extraordinary item
Basic $ 0.38 $ 0.02 $ 0.40
Diluted $ 0.37 $ 0.02 $ 0.39
Net income available to common shareholders per share
Basic $ 0.26 $ 0.02 $ 0.29
Diluted $ 0.26 $ 0.02 $ 0.28
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization 7,223 - 7,223
Amortization of deferred financing
costs on debentures 6 - 6
Convertible subordinated debenture interest 184 - 184
Depreciation from unconsolidated
subsidiary, net of tax 135 - 135
Extraordinary item, early extinquishment of debt 582 - 582
Convertible preferred dividend 72 - 72
Depreciation on sold properties - - -
----------------------------------------
Funds from operations $ 13,474 $ 436 $ 13,910
----------------------------------------
Funds from operations per share $ 0.65 $ 0.02 $ 0.67
========================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 (UNAUDITED)
----------------------------
ADJUSTMENT
----------
<S> <C>
Revenue:
Operating and investment revenue:
Minimum rents $ -
Straight-line rents -
Expense reimbursements -
Mortgage interest income -
----------------------------
Total operating and investment revenue -
----------------------------
Other revenue:
Fee income 2,980
Equity in net income of affiliate 474
----------------------------
Total other revenue 3,454
----------------------------
Total revenue 3,454
----------------------------
Expenses:
Real estate taxes -
Property operating and leasing -
General and administrative -
Depreciation and amortization
Interest expense:
Interest incurred, net -
Amortization of deferred financing costs -
----------------------------
Total expenses -
----------------------------
Operating income 3,454
Other income (expense)
Gain or (loss) on sale of real estate -
Other income -
----------------------------
Income before extraordinary item 3,454
Extraordinary item, early extinguishment of debt -
----------------------------
Net income 3,454
Preferred Dividends -
----------------------------
Net income available to common shareholders $ 3,454
============================
Net income available to common shareholders per share
before extraordinary item
Basic
Diluted
Net income available to common shareholders per share
Basic
Diluted
FUNDS FROM OPERATIONS
Add back:
Depreciation and amortization -
Amortization of deferred financing
costs on debentures -
Convertible subordinated debenture interest -
Depreciation from unconsolidated
subsidiary, net of tax -
Extraordinary item, early extinquishment of debt -
Convertible preferred dividend -
Depreciation on sold properties -
----------------------------
Funds from operations $ 3,454
----------------------------
Funds from operations per share $ 0.17
============================
</TABLE>
